Approved by the ALLETE Board of Directors on July 27, 2016 ALLETE, INC. BOARD OF DIRECTORS EXECUTIVE COMPENSATION COMMITTEE CHARTER Purposes of Committee The purposes of the Executive Compensation Committee (the "Committee") of the Board of Directors (the "Board") of ALLETE, Inc. (the "Company") are to discharge the Board’s responsibilities relating to compensation of the Company’s executives, establish the Company’s philosophy and policies regarding executive and director compensation, oversee the administration of the Company's director and executive compensation programs, review the compensation of directors and executive management, and prepare any report on executive compensation required by the rules and regulations of the Securities and Exchange Commission (the "Commission" or “SEC”) or other regulatory body to be included in the Company’s annual proxy statement filed with the SEC. Committee Membership The Committee shall consist of three or more members of the Board each of whom is, in the business judgment of the Board, “independent” under the rules of the New York Stock Exchange and shall satisfy any other necessary standards of independence under the federal securities and tax laws. Each member shall also qualify as “non-employee directors” within the meaning of Rule 16b-3 promulgated under the Securities Exchange Act of 1934 as amended and “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended. Members shall be appointed by the Board after consideration of recommendations of the Company's Corporate Governance and Nominating Committee, and shall serve at the pleasure of the Board and for such term or terms as the Board may determine. Committee Structure and Operations The Board shall designate one member of the Committee as its Chair. In the event the Chair is not present at the meeting, the members present at that meeting shall designate one of its members as the acting chair of such meeting. The Committee shall meet at least three times a year at a time and place determined by the Board or the Committee Chair, with further meetings to occur when deemed necessary or desirable by a majority of the Committee or its Chair.

A majority of the Committee members currently holding office constitutes a quorum for the transaction of business. The Committee shall take action by the affirmative vote of a majority of the Committee members present at a duly held meeting. The Committee may meet in person or telephonically. The Committee may act by unanimous written consent when deemed necessary or desirable by the Committee or its Chair. Any vacancy on the Committee shall be filled by majority vote of the Board after consideration of recommendations of the Company’s Corporate Governance and Nominating Committee. No member of the Committee shall be removed except by majority vote of the Board. The Committee may invite such members of management to its meetings as it may deem desirable or appropriate, consistent with the maintenance of the confidentiality of compensation discussions. The Committee will periodically meet in executive session without management present. The Company's Chief Executive Officer ("CEO") will not attend portions of any meeting when the CEO's performance or compensation is discussed, unless specifically invited by the Committee. The Committee shall maintain minutes of its meetings and records relating to those meetings and shall report regularly to the Board on its activities as appropriate. Committee Duties and Responsibilities The following are the duties and responsibilities of the Committee: 1.

In consultation with the Board and executive management, establish the Company’s philosophy and policies regarding director and executive compensation, and oversee the development and implementation of director and executive compensation programs.

2.

Based on the performance evaluation conducted by the Corporate Governance and Nominating Committee and Board, and other factors as appropriate, set the CEO’s compensation level, to be ratified by the Board, and set performance goals and approve awards for the CEO under incentive compensation plans.

3.

Review and approve the CEO’s compensation recommendations and individual elements of total compensation for the executive management of the Company other than the CEO.

2

4.

Select a peer group of companies against which to benchmark/compare the Company’s compensation systems for executive management.

5.

To monitor compensation trends and solicit independent advice where appropriate.

6.

Review and approve Executive Officer employment agreements, if any.

7.

Take action to recoup Executive Officer compensation, per the ALLETE Compensation Recovery Policy.

8.

Make recommendations to the Board with regard to shareholders say on pay and say on pay frequency for the Company’s annual proxy statement.

9.

Review and approve revisions to the Company’s specified officers salary range structure and annual salary.

10. Review and approve the Company’s executive incentive compensation program administration, including the annual and long-term incentive plans, for consistency with the Committee’s compensation philosophy and policies as to participation, annual and long-term incentive awards, corporate goals, and cash and equity-based awards paid to executive management pursuant to such annual and long-term incentive plans. 11. Review and make recommendations to the Board with respect to amendments to the Company's incentive compensation plans and equitybased plans, oversee the activities of the individuals and committees responsible for administering these plans, and discharge any responsibilities imposed on the Committee by any of these plans. 12. Monitor compliance by management with respect to compensation matters, including overseeing the Company's policies on structuring compensation programs to preserve tax deductibility, and, as and when required, establishing performance goals and certifying that performance goals have been attained for purposes of Section 162(m) of the Internal Revenue Code. 13. Review the Company’s benefit programs and approve executive benefit changes subject, where legally required, to shareholder or Board approval. 14. Prepare and issue the evaluations and reports required under "Committee Reports" below. 15. Any other duties or responsibilities expressly delegated to the Committee by the Board from time to time.

3

16. The Committee shall review, discuss with management, and approve the “Compensation Discussion and Analysis” required by the Securities and Exchange Commission Regulation S-K, Item 402, for inclusion in the Company’s annual proxy statement. Delegation to Subcommittee The Committee may, in its discretion, delegate a portion of its duties and responsibilities to a subcommittee of the Committee. In particular, the Committee may delegate the approval of certain transactions to a subcommittee consisting solely of members of the Committee who are (i) "NonEmployee Directors" for the purposes of Rule 16b-3 of the Securities Exchange Act of 1934, as in effect from time to time, and (ii) "outside directors" for the purposes of Section 162(m) of the Internal Revenue Code, as in effect from time to time. Committee Reports The Committee shall produce the following reports and provide them to the Board. 1.

The annual Compensation Committee Report for inclusion in the Company's annual proxy statement in accordance with applicable Securities and Exchange Commission rules and regulations.

2.

An annual performance evaluation of the Committee, which evaluation must compare the performance of the Committee with the requirements of this Charter. The performance evaluation should also recommend to the Board any improvements to this Charter deemed necessary or desirable by the Committee. The performance evaluation by the Committee shall be conducted in such manner as the Committee deems appropriate. The report to the Board may take the form of an oral report by the Chair of the Committee or any other member of the Committee designated by the Committee to make this report.

3.

A summary of the proceedings of each Committee meeting shall be presented to the Board at its next regularly scheduled meeting. Meeting notices, agendas, and minutes of Committee meetings will be promptly sent to the Board.

4

Resources and Authority of the Committee The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the sole authority to retain, oversee work, discharge, and approve fees and other terms of retention of any compensation consultant, legal counsel or other advisor (each and any, a “Compensation Advisor”). Before selecting or receiving advice from a Compensation Advisor, the Committee will take into consideration all factors relevant to that person’s independence from management, including the following: (a) the provision of other services to the Company by the Compensation Advisor’s firm or employer; (b) the amount of fees received from the Company by the Compensation Advisor’s firm or employer, as a percentage of the total revenue of such firm or employer; (c) the policies and procedures of the Compensation Advisor’s firm or employer that are designed to prevent conflict of interests; (d) any business or personal relationship between the Compensation Advisor and any member of the Committee; (e) any Company stock owned by the Compensation Advisor; and (f) any business or personal relationship between the Compensation Advisor, or the Compensation Advisor’s firm or employer and any executive officer of the Company. While the members of the Committee have the duties and responsibilities set forth in this Charter, nothing contained in this Charter is intended to create, or should be construed as creating, any responsibility or liability of members of the Committee, except to the extent otherwise provided under applicable federal or state law.

5